Estate of Leonor R. Dizon, Etc. v. State of New Jersey, Etc.

• Court: New Jersey Superior Court Appellate Division
• Decided: April 8, 2025
• Docket: A-1724-23
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1724-23

ESTATE OF LEONOR R. DIZON, by her Administrator Ad Prosequendum, TERESA APPROVED FOR PUBLICATION FINAMORE and TERESA FINAMORE, individually, April 8, 2025 APPELLATE DIVISION Plaintiff-Appellant,

v.

STATE OF NEW JERSEY, DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES,

Defendant-Respondent. ______________________________

Submitted March 4, 2025 – Decided April 8, 2025

Before Judges Susswein, Perez Friscia and Bergman.

On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-3466-23.

Solomon Law Firm, LLC, and Sarno, Da Costa, D'Aniello & Maceri, LLC, attorneys for appellant (Franklin P. Solomon, Daniel Devinney and Paul M. Da Costa, on the briefs).

Matthew J. Platkin, Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; James A. McGhee, Deputy Attorney General, on the brief).

The opinion of the court was delivered by

PEREZ FRISCIA, J.A.D.

In this Medicaid lien dispute, plaintiff Estate of Leonor R. Dizon

(Estate), by its administrator ad prosequendum, Teresa Finamore, appeals from

a Law Division order denying its application to extinguish the Division of

Medical Assistance and Health Services' (Division) lien asserted against the

Estate's assets pursuant to N.J.S.A. 30:4D-7.2 (estate asset statute). The

Division's lien seeks recovery of $214,391.95 in Medicaid benefits Dizon

(decedent) received after turning fifty-five years old. The Division filed its

lien against all the Estate's assets, including any award the Estate receives

from its pending survivorship action, N.J.S.A. 2A:15-3. The Estate disputes

that a survivorship award is subject to a Division lien under the estate asset

statute for all of decedent's Medicaid benefits paid, arguing that its interest in

the survivorship claims did not constitute property of the estate at the time of

decedent's death, as required by the statute. Instead, it contends, the Division

is only entitled to reimbursement from an award for decedent's tort-related

medical expenses for her injuries pursuant to a separate statutory provision

specifically addressing third-party liability recovery (TPL statute), N.J.S.A.

30:4D-7.1. We conclude the Division's lien is valid against all the Estate's

A-1724-23 2 assets under the estate asset statute, N.J.S.A. 30:4D-7.2, which includes any

survivorship action award, and therefore affirm.

I.

Decedent received Medicaid benefits from August 1, 2006, through

March 31, 2018. On March 21, 2018, while at Trinitas Regional Medical

Center (Trinitas), decedent fractured her neck after falling from her bed. She

passed away ten days later.

On August 9, the Surrogate's Court issued letters of administration to

decedent's daughter, Finamore. In September, the Division sent the Estate a

letter advising of its lien and asserting a claim against the Estate's assets,

pursuant to 42 U.S.C. § 1396p and the estate asset statute, for $214,391.95.

The Division acknowledged its "recovery [wa]s limited to the value of the

estate." (Emphasis omitted). The Division asserted that "[t]he amount sought

represent[ed] funds expended by the New Jersey Medicaid program for

medical and health-related services and supplies received by the dece[dent] on

or after age [fifty-five]." It attached decedent's certified Medicaid payment

records. The Division noticed the Estate that it could file an action in Superior

Court challenging the validity of the lien prior to a final agency adjudication.

A-1724-23 3 On January 15, 2019, the Estate filed a four-count medical malpractice

complaint, which included survivorship claims. 1 On April 1, the Division filed

its statutory lien for $214,391.95, pursuant to N.J.S.A. 30:4D-7.2 to -7.6, with

the State of New Jersey and sent notice of the recorded lien to the Estate. The

Division noted the claim was against the "Estate['s] assets includ[ing] but not

limited to . . . [the] [v]alue of the [e]state[,] including proceeds from [the]

medical malpractice lawsuit."

On October 19, 2023, the Estate filed an order to show cause and

verified complaint against the Division seeking a summary disposition

pursuant to Rule 4:67-1(a). The Estate requested the court issue an order

providing: (1) that the Division's lien against the Estate for Medicaid

reimbursement of medical expenses paid on decedent's behalf was limited to

recovery for tort-related medical expenses under the New Jersey Medical

Assistance and Health Services Act's 2 TPL statute, N.J.S.A. 30:4D-7.1(b), and

not subject to reimbursement under the estate asset statute, N.J.S.A. 30:4D-7.2,

1 We note the Estate maintains that no wrongful death claim, N.J.S.A. 2A:31-1 to -6, was pleaded in the complaint, although counts three and four specifically claim Finamore's loss of companionship. As it is undisputed that a wrongful death claim is not subject to a Medicaid lien, we need not address these claims. 2 N.J.S.A. 30:4D-1 to -19.5.

A-1724-23 4 for all of decedent's received Medicaid benefits after turning fifty-five;3 (2)

that any Division lien claim above the tort-related medical expenses against

the Estate's assets, more particularly against the Estate's survivorship claim

recovery, was extinguished; (3) a determination of the maximum Medicaid

reimbursement amount owed to satisfy the Estate's obligation under the TPL

statute; and (4) any other legal and equitable relief. Notably, the Estate's

medical malpractice action was not resolved.

On January 9, 2024, after argument, the court issued an order and

accompanying cogent written decision denying the Estate's requested relief.

The Estate argued the TPL statute governed the Division's reimbursement from

the Estate's survivorship claim recovery because unliquidated personal injury

claims are not an asset subject to Medicaid reimbursement. Specifically, the

Estate posited the Division could only assert a Medicaid lien for

reimbursement of medical expenses against assets the decedent had legal title

to or an interest in at the time of her death. Therefore, it contended the

Division was only entitled to reimbursement under the TPL statute for medical

expenses recovered from the third-party medical malpractice defendants.

3 We note the parties do not dispute the accuracy of the Division's lien amount of $214,391.95 for Medicaid correctly paid on decedent's behalf for services received after she turned fifty-five.

A-1724-23 5 The Division argued it could pursue reimbursement pursuant to both the

TPL statute, N.J.S.A. 30:4D-7.1(b), and the estate asset statute, N.J.S.A.

30:4D-7.2. The Division elaborated that under the TPL statute, it was entitled

to reimbursement for medical expenses it paid on decedent's behalf that were

causally related to her personal injuries, which the Estate was pursuing in its

survivorship action. Further, the Division argued under the estate asset statute,

it was entitled to reimbursement from any of the Estate's assets for benefits

paid on decedent's behalf after the age of fifty-five. The Division argued that

any recovery by the Estate on its survivorship claims was an estate asset

pursuant to N.J.S.A. 30:4D-7.2(a)(3).

The court found that the estate asset statute controlled, and the Division

validly levied its lien. It noted the Division was "not simply seeking to

enforce its rights against a third-party recovery—[the lien's] scope [wa]s

broader." In considering the Estate's argument that any survivorship claim

recovery was not property of the Estate under N.J.S.A. 30:4D-7.2(a)(3), the

court determined the statute's plain language was clear, and a survivorship

claim met the definition of an asset. The court held decedent possessed an

"interest at the time of [her] death" in the medical malpractice claims.

Accordingly, the court held the Estate's claims "form[ed] part of the estate

subject to [the Division's] medical lien."

A-1724-23 6 On appeal, the Estate contends the court erroneously: characterized

decedent's malpractice claims as an estate asset subject to a Medicaid lien;

failed to recognize that the source of the funds the Division claimed

reimbursement against dictated the applicable statutory authority; and

determined the Estate's survivorship claims were property, even though

decedent's inchoate claims were not property held at the time of her death.

II.

"[A] trial court's interpretation of the law and the legal consequences

that flow from established facts are not entitled to any special deference."

Strickland v. Foulke Mgmt. Corp., 475 N.J. Super. 27, 38 (App. Div. 2023)

(alteration in original) (quoting Rowe v. Bell & Gossett Co., 239 N.J. 531, 552

(2019)). We review a court's statutory interpretation de novo. In re H.D., 241

N.J. 412, 418 (2020).

When interpreting a statute, we first review the actual language of the

statute. Goldhagen v. Pasmowitz, 247 N.J. 580, 599 (2021). "Where statutory

language is clear, courts should give it effect unless it is evident that the

Legislature did not intend such meaning." Bubis v. Kassin, 184 N.J. 612, 626

(2005) (quoting Rumson Ests., Inc. v. Mayor of Fair Haven, 177 N.J. 338, 354

(2003)). We "ascribe[] to the statutory words their ordinary meaning and

significance and read[] them in context with related provisions so as to give

A-1724-23 7 sense to the legislation as a whole." W.S. v. Hildreth, 252 N.J. 506, 519

(2023) (quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005)). "If the

language of a statute is clear, a court's task is complete." Doe v. Est. of

C.V.O., 477 N.J. Super. 42, 56 (App. Div. 2023) (quoting In re Plan for

Abolition of the Council on Affordable Hous., 214 N.J. 444, 468 (2013)),

certif. denied, 257 N.J. 232, 257 N.J. 242, and 257 N.J. 259 (2024). "When

reviewing a statute's plain language, we do not parse its provisions. Rather,

we consider 'not only the particular statute in question, but also the entire

legislative scheme of which it is a part.'" State v. Italiano, 480 N.J. Super. 1, 9

(App. Div. 2024) (quoting State v. Olivero, 221 N.J. 632, 639 (2015)); see also

N.J.S.A. 1:1-1 ("In the construction of . . . statutes[,] . . . words and phrases

shall be read and construed with their context, and shall, unless inconsistent

with the manifest intent of the legislature[,] . . . be given their generally

accepted meaning, according to the approved usage of the language.").

"[I]t is well recognized that 'Medicaid, enacted in 1965 as Title XIX of

the Social Security Act, [42 U.S.C. §§ 1396 to 1396w-6], is designed to

provide medical assistance to persons whose income and resources are

insufficient to meet the costs of necessary care and services.'" G.C. v. Div. of

Med. Assistance & Health Servs., 249 N.J. 20, 26 (2021) (alteration in

original) (quoting Atkins v. Rivera, 477 U.S. 154, 156 (1986)); see also 42

A-1724-23 8 U.S.C. § 1396-1. "Participation in the Medicaid program is optional for states;

however, 'once a State elects to participate, it must comply with the

requirements' of the federal Medicaid Act and federal regulations adopted by

the Secretary of Health and Human Services in order to receive federal

Medicaid funds." D.C. v. Div. of Med. Assistance & Health Servs., 464 N.J.

Super. 343, 354 (App. Div. 2020) (quoting Harris v. McRae, 448 U.S. 297, 301

(1980)).

Pursuant to the New Jersey Medical Assistance and Health Services Act,

the Division is responsible for administering Medicaid in our State. See

N.J.S.A. 30:4D-4. The Division is required to manage the State's Medicaid

program in a fiscally responsible manner. See Dougherty v. Dep't of Hum.

Servs., Div. of Med. Assistance & Health Servs., 91 N.J. 1, 4-5, 10 (1982)

(remanding back to the agency to consider the public interest and the

"increasing social demands for limited public resources").

To further expand available funding for Medicaid benefits, the "federal

Medicaid law has required participating states to enact certain 'estate' recovery

provisions as part of their medical assistance plans." Est. of DeMartino v. Div.

of Med. Assistance & Health Servs., 373 N.J. Super. 210, 217 (App. Div.

2004). "[T]o satisfy the federal estate recovery requirements, states must

define a decedent's estate to include at least 'all real and personal property and

A-1724-23 9 other assets included within the individual's estate, as defined for purposes of

State probate law.'" In re Est. of Brown, 448 N.J. Super. 252, 258 (App. Div.

2017) (quoting 42 U.S.C.A. § 1396p(b)(4)(A)); see also 42 U.S.C. §

1396p(b)(4)(B) (permitting states to broadly define estate to include "any other

real and personal property and other assets in which the individual had any

legal title or interest at the time of death . . . , including such assets conveyed

to a survivor, heir, or assign of the deceased"). Accordingly, the Division "is

authorized and empowered to use 'all reasonable measures to ascertain the

legal or equitable liability of third parties to pay for care and services ' of the

recipient and, where appropriate, to seek reimbursement." In re Kietur, 332

N.J. Super. 18, 23-24 (App. Div. 2000) (quoting N.J.S.A. 30:4D-7(k)).

III.

The Estate contends the Division's lien for reimbursement of all the

Medicaid benefits paid on decedent's behalf after she reached the age of fifty-

five is invalid and uncollectable against the Estate's survivorship action

damages obtained from a third-party tortfeasor, because the Division is limited

to only recovering the decedent's "tort-related" medical expenses. The Estate

posits that because most of the Division's $214,391.95 lien is for decedent's

medical expenses that are "wholly unrelated to the personal injury action," the

Division is foreclosed from "maximiz[ing] its reimbursement out of any tort

A-1724-23 10 recovery." In support of these arguments, the Estate argues any survivorship

claim recovery must be treated only "as [a] third-party tort recover[y]" under

the TPL statute and federal law, see 42 U.S.C. §§ 1396a(a)(25)(A)-(B),

1396a(a)(25)(H), 1396k(a), and not an estate asset, which would permit the

Division to assert its lien under the estate asset statute and federal law, 42

U.S.C. §§ 1396p(b)(1)(B), (b)(4). The underpinning of the Estate's argument

is that its survivorship claims are not an estate asset subject to the Division's

lien because decedent had no legal title or interest in the claims at the time of

her death. We are unpersuaded.

We begin our review of the Estate's arguments by examining the plain

language of the estate asset statute that the Division relies on for

reimbursement. The estate asset statute authorizes the Division to file a lien

against the "estate of [a Medicaid] recipient." N.J.S.A. 30:4D-7.2(a)(2).

Specifically, the estate asset statute states that "a lien may be filed against and

recovery sought from the estate of the deceased recipient for [Medicaid]

assistance correctly paid . . . on [the deceased recipient's] behalf for all

services received when he [or she] was [fifty-five] years of age or older."

Ibid.; see also 42 U.S.C. §1396p(b)(1)(B). The plain meaning of the statute

permits the Division to seek reimbursement for all Medicaid benefits paid on a

deceased recipient's behalf by filing a lien against their estate. The statute

A-1724-23 11 specifically authorizes the Division to file an estate asset lien only after the

recipient's death. Again, the Estate does not dispute the accuracy of the

Division's lien amount or that decedent received Medicaid benefits after she

turned fifty-five years of age. As decedent undisputedly received the Medicaid

benefits that comprise the lien, the Estate's argument that the Division

"dress[ed] up its demand as an estate lien" is without merit. The estate asset

statute directly authorizes the Division's lien for all paid Medicaid-covered

medical services from August 1, 2006, through March 31, 2018, against the

Estate's assets.

We now turn to the Estate's argument that "[c]ritical to the inquiry is the

statutory definition of an 'estate asset.'" N.J.S.A. 30:4D-7.2(a)(3) provides that

an "'estate' includes all real and personal property and other assets . . . as

defined in N.J.S.[A.] 3B:1-1, as well as any other real and personal property

and other assets in which the recipient had any legal title or interest at the time

of death, to the extent of that interest." See N.J.S.A. 3B:1-1 (defining estate as

"all of the property of a decedent . . . as the property is originally constituted

and as it exists from time to time during administration"). It is clear an estate

asset is widely defined to include all interests a Medicaid recipient possessed

at the time of death. Therefore, a decedent's estate possesses as an estate asset

any interest in medical malpractice claims held by the Medicaid recipient.

A-1724-23 12 An estate is indisputably charged to pursue survivorship claims on

behalf of the beneficiaries, as the Estate did here, and seek recovery against a

tortfeasor. See F.F. v. G.A.D.R., 331 N.J. Super. 23, 27-28 (App. Div. 2000)

(noting that a survivorship claim is an asset of a decedent's estate). "Pursuant

to the Survival Act, any cause of action a potential plaintiff had during his or

her lifetime survives the decedent's death[,] and the executor or administrator

of the decedent's estate may sue on that action." Monk v. Kennedy Univ.

Hosp., Inc., 473 N.J. Super. 178, 183 (App. Div. 2022) (citing N.J.S.A. 2A:15-

3). Relevantly, N.J.S.A. 3B:10-25 provides that an estate administrator "has

the same standing to sue . . . as . . . [the] decedent had immediately prior to

death." Further, the Estate's representative must "take all steps reasonably

necessary for the management, protection and preservation of[] the estate in

his [or her] possession." N.J.S.A. 3B:10-29. As decedent held an interest in

the potential medical malpractice claims arising from her injuries sustained at

Trinitas, her interest passed to the Estate after her death.

Further, we are unpersuaded by the Estate's argument that decedent did

not hold an interest in her potential medical malpractice claims at the time of

her death because she had not filed the claims within the ten days prior to her

passing. Our Supreme Court has held that "[i]ntangibles may also constitute

property." Dugan v. Dugan, 92 N.J. 423, 428 (1983). Moreover, "'[t]he right

A-1724-23 13 to receive monies in the future is unquestionably . . . an economic resource'

subject to equitable distribution based upon proper computation of its present

dollar value." Kikkert v. Kikkert, 177 N.J. Super. 471, 475 (App. Div. 1981)

(emphasis omitted) (quoting Kruger v. Kruger, 73 N.J. 464, 468 (1977)). 4 The

court correctly found decedent's medical malpractice claims formed part of the

estate as an asset. We conclude decedent's interest in any recovery from

alleged medical malpractice became an asset of the Estate, which the Estate

thereafter pursued as survivorship claims for decedent's beneficiaries.

We next address the Estate's argument that the TPL statute dictates the

amount the Division may recover on its lien because statutorily, the source of

the funds limits the Division's ability to collect through its lien. The TPL

statute states that "[w]hen a recipient, his [or her] guardian, executor,

administrator or other appropriate representative brings an action for damages

4 We note a plaintiff's personal injury claims, which would include survivorship claims, have long been recognized as an asset in other contexts. We note there is currently pending New Jersey legislation to address consumer legal funding loans, which are recognized transactions in which a loan company purchases, and a consumer sells, a contingent right to receive an amount of a potential personal injury claim award. Generally, a plaintiff receives loan funds from a third party who retains a recovery interest against a future potential tort litigation award. Consumer Legal Funding Act, S. 1475/A. 1931 (2024). Black's Law Dictionary defines "litigation funding" as "[a]n agreement between a litigant and third party to finance a lawsuit in exchange for a share of any recovery. Litigation funding is a type of investment in a lawsuit, typically for the plaintiff." Black's Law Dictionary 1117 (12th ed. 2024).

A-1724-23 14 against a third party, written notice shall be given to the . . . Division," and

after the Estate receives a recovery, the Division "shall immediately [be]

reimburse[d] . . . in full from the proceeds of any settlement [or] judgment."

N.J.S.A. 30:4D-7.1(b). It is undisputed that the TPL statute only permits the

Division to be reimbursed for a Medicaid recipient's tort-related medical

expenses recovered from a third party. However, the Estate's contention that

the source of funds dictates the Division's reimbursement is unsupported

because federal and state statutes plainly provide that it is the recipient's living

status that governs the Division's authority to attach a lien for reimbursement.

The federal Medicaid Act's anti-lien statute states, "No lien may be imposed

against the property of any individual prior to his [or her] death on account of

medical assistance paid or to be paid on his [or her] behalf under the State

[Medicaid] plan." 42 U.S.C. § 1396p(a)(1) (emphasis added). The Estate

misapplies the TPL statute because the Division was authorized under the

estate asset statute, N.J.S.A. 30:4D-7.2(a)(2), to seek reimbursement against

the Estate's assets for Medicaid benefits paid on decedent's behalf after she

turned fifty-five, and it was not limited to reimbursement from any tort-related

medical expenses recovered from Trinitas.

We further reject the Estate's argument that the United States Supreme

Court's holding in Arkansas Department of Health & Human Services v.

A-1724-23 15 Ahlborn, 547 U.S. 268 (2006), specifically precludes the Division from

asserting a Medicaid lien for the $214,391.95 in medical expenses it paid on

decedent's behalf. The United States Supreme Court addressed whether the

State of Arkansas Department of Health and Human Services (ADHS) could

assert a statutory Medicaid lien against a living recipient's entire medical

malpractice settlement with a third-party tortfeasor. Id. at 272-75. It limited

ADHS's lien after finding that relevant federal Medicaid statutes, including the

anti-lien statute, 42 U.S.C. § 1396p(a), restricted reimbursement from the tort

settlement to "designated . . . payments for medical care." Id. at 284.

Relevantly, the long-established public policy considerations underpinning the

anti-lien statute, which was designed to protect living injured Medicaid

recipients' rights to the use and benefit of their tort recoveries, are not

implicated here. See id. at 285 (acknowledging that a living Medicaid

recipient's settlement proceeds constitute property); see also Kietur, 332 N.J.

Super. at 24 (noting that "no statutory requirements are imposed upon [the

Division] to perfect a lien against a living Medicaid recipient who recovers

monies from a liable third party"). Accordingly, the TPL statute and Ahlborn

do not preclude the Division's lien against the Estate for Medicaid benefits

paid on decedent's behalf after turning fifty-five. The Division is permitted

A-1724-23 16 under the estate asset statute, N.J.S.A. 30:4D-7.2(a)(2), to seek reimbursement

from the Estate for decedent's paid Medicaid medical expenses.

To the extent that we have not addressed plaintiff's remaining

contentions, it is because they lack sufficient merit to be discussed in a written

opinion. R. 2:11-3(e)(1)(E).

Affirmed.

A-1724-23 17